Showback vs chargeback: Showback new resource analysis tool of choice

Showback was once considered the first step toward implementing chargeback -- often hailed
as one of the most valuable features of cloud
storage. But organizations today are putting showback to great use on its own as a resource
analysis tool, and are holding off using the more complex chargeback process.

In a showback
vs. chargeback comparison, there's just one major difference. Chargeback applies the costs of
IT services, hardware or software to the business unit that uses them. It has been a goal of IT for
years, and the cloud was considered a way to facilitate the use of chargeback. Showback,
a term that has been in use for only a couple of years, provides IT, business units and management
the same analysis that would be used for chargeback -- but doesn't bill anyone for the
services.

To implement
chargeback, IT departments hand their company’s business units a formal bill to recover IT
costs. That concept hasn’t caught on with most organizations because it’s difficult getting finance
departments, IT centers and business units to agree on base metrics.

More information on showback and chargeback

So showback is becoming the more common way to track usage of IT resources and map them to
specific applications, business units and end users without involving the finance or accounting
departments. Companies are using showback to instill a culture of cost
awareness, to justify requests for new purchases and even make decisions on whether a company
has the IT infrastructure to support an acquisition.

“How many use the metrics for measuring? Quite a few do,” said Greg Shulz, founder of
Stillwater, Minn.-based storage consulting firm Storage I/O Group. “How many [are] actually doing
billing?
Not the majority. Many use a tool to derive metrics and measurements, but not to actually generate
an invoice and chargeback.”

“If you can’t agree on the metrics, the tool is never going to work,” said Phil Godwin, vice
president of sales and marketing at Clear Technologies Inc., an IT service provider and consultant
company. “Infrastructure is funded project by project. If you do chargeback, how do you ensure a
business unit is getting the fair share of the expense?”

Another problem with chargeback is that it’s hard to keep up with ever-changing costs and IT
budgets as new servers, applications and other technologies are implemented.

“That budget is always changing,” said Marc Staimer, president of Beaverton, Ore.-based Dragon
Slayer Consulting. “It’s always in a state of flux. That's why the majority don’t even bother.”

A data center engineer at a health care company said he implemented showback instead of
chargeback because chargeback has to be integrated with the finance or accounting system. The
organization is using Visual Storage Intelligence (VSI), a software-as-a-service
(SaaS) product developed by Clear Technologies. The company started using the tool in late 2011
with a goal of using the data to make strategic decisions and to make business units more
cost-conscious of IT resources.

“Let’s say somebody asks for another module for an application,” said the engineer, who asked
not to be identified because he didn't have clearance from his company to talk to the media. “We're
able to give them a view into the cost of that added component. At some point, the business unit
has to make a choice if that extra feature or function is worth it. Showback raises a level of
awareness that these things come at a cost.”

EMC recently announced ProSphere 1.5, an SRM application that delivers showback capabilities via
reports for capacity reporting and analysis. A report can show capacity allocated to the host and
application, as well as service-level
agreement (SLA) requirements. The product also has a built-in search engine for objects built
on a REST interface to work with server integration for the cloud.

Kevin Gray, product marketing manager for EMC’s SRM product group, said most of his company’s
customers are more interested in showback vs. chargeback. "We're not seeing many doing hard
chargeback,” he said. “They're not interested in giving somebody a bill.”

NetApp OnCommand Insight provides end-to-end path visibility
into heterogeneous environments and tracks
storage utilization and consumption by tenant, business unit, line of business, tier and
application. This showback process can help companies save money by seeing how much storage an
application consumes and then placing that application on the proper storage tier.

“This information can be used by managers and executives in the business entity to make business
decisions on how to optimize their resource usage,” said Kristina Brand, product marketing manager
for NetApp OnCommand. “For example, they can quickly see the amount of storage an application takes
up for the actual usage, [which] may justify moving that application to a lower tier [to] save
money.”

Brand said service providers are using OnCommand to provide itemized or granular reporting and
billing to their customers, which is considered a form of chargeback. However, she said cloud
providers are more commonly using OnCommand to deliver a granular view of how applications are
consuming resources.

“Our customers are still primarily concerned about showback as a strategy for instilling cost
accountability,” Brand said.